The Legal Ombudsman has released guidance covering complaints about legal costs. This follows in the wake of several high-profile court cases involving legal fees wherein consumers made successful claims for refunds. The refunds in question were granted on the grounds that the costs involved for legal services hadn’t been clear or were unreasonably high.

In response, the Legal Ombudsman have answered common questions around requests for costs information, in addition to case study publications that aim to make clear the issue types often involved with these cases. The guidance also illustrates how the complaints service would likely respond to certain kinds of disputes. 

Explained: Cost Complaints

After receiving a complaint, the Legal Ombudsman’s first port of call will be to ensure the legal provider in question made sure the consumer in question thoroughly understood what they would or would potentially be expected to pay.

Members of the public who have been injured as a result of medical negligence or traffic accidents will likely claim compensation from the party they believe to be at fault. To bring a legal case against that party, a solicitor will be hired. 

A lot of solicitors would likely take this work on a “no win, no fee” basis. In this case, if a client’s case doesn’t render the expected results, they (the client) will not have to pay a fee. However, if the case is won, it is expected that the solicitor will take a share of the compensation. The success fee is most often a percentage of the solicitor’s costs and capped at a percentage of the compensation (usually 25%) in addition to the solicitor’s normal fee.

Legal Fee Refunds

The clients who received refunds were able to clearly evidence that the amounts they were charged were “unfairly high and/or weren’t made clear.” These consumers were represented by law firms acting on a consumer’s behalf to make a claim against the initial solicitors charging unreasonable fees.

In most cases, the client won’t have the initial costs information given to them by the solicitor. This usually means the consumer or the law firm representing them has to ask the original solicitor for it.

In this instance, some solicitors have said they wouldn’t provide this information, whereas others offered it for a fee. It is important to remember that time limits apply to the complaints process and that if the original work did indeed happen a while back, a solicitor is likely to claim that the acceptable time window has been surpassed.

The Legal Ombudsman’s Position

In response, the Legal Ombudsman is urging firms acting as consumer representatives to behave in a way that aligns with their respective regulators’ expectations. They are also encouraging law firms to only pursue complaints where it is clear that a consumer hasn’t been serviced appropriately.

If it becomes clear following an investigation that the consumer’s concerns are substantial, then the solicitor being investigated is obliged to put things right in keeping with the Legal Ombudsman’s approach. The complaints service has also notified solicitors receiving requests for information that they are obliged to respond accurately and appropriately.

Some common questions the Legal Ombudsman receive regarding requests for costs information.

1. Do Solicitors Have to Provide the Bill if a Consumer Asks for it?

If a consumer claims to have never received their bill, and the solicitor refuses to provide one, please bear in mind that this would be sufficient grounds for a complaint. A consumer is entitled to see their bill, and if they, in fact, never received it, the solicitor should consider providing one promptly. The solicitor will also need to consider whether the delay had an impact on the client and whether this is grounds for compensation.

If a bill has been received a bill but the consumer has lost it, the Legal Ombudsman maintains “a solicitor should meet a reasonable request for a copy of a document they hold if a consumer asks for it. If they don’t, then this could be grounds for complaint – and could be referred to us. To prevent this from happening, in this situation, a solicitor should provide a copy of a bill if they’re asked for it.”

“However, it isn’t necessarily unfair for the solicitor to ask the consumer to pay some money toward this. It’s long-established (Law Society) practice that the copy of the bill on the solicitor’s file is their property (with the consumer’s being the consumer’s property).”

The solicitor may ask the consumer to cover reasonable expenses involved with sending a copy of the bill (the solicitor may have to retrieve said bill from an off-site storage facility). Further expenses could include time spent photocopying, postage, etc. What’s reasonable will be considered on a case-by-case basis.

2. How Much Time Is There to Raise a Cost Complaint?

The complaints service has confirmed that a consumer has within a year of becoming aware of any suspected mistreatment.

The Legal Ombudsman has also revealed that the complaints they most commonly receive concern solicitors not providing bills. “The issue consumers are complaining about is not being provided with a bill. This means, usually, that the consumer’s date of awareness is the date the solicitor tells them they won’t provide the bill.”

“If a solicitor tells us that they think a complaint has been made too late (under Rule 5.4 of our Scheme Rules), we’ll ask the consumer or their representative some questions and decide, based on everything we see and hear, what we think the consumer’s date of awareness was.”

“If we do decide a complaint has been brought in time – and go on to investigate it – then we’re likely to tell the solicitor to provide the consumer with the bill or a copy of it.”

3. What Happens After the Consumer Receives Their Bill?

After receiving their bill, the consumer or their representative should carefully consider whether they have a valid complaint. Equally, the solicitor should carefully consider whether, in hindsight, they provided a good costs service that was in line with the Legal Ombudsman established approach (see link above).

But will the Legal Ombudsman Investigate? It is likely that the consumer’s dealings with the solicitor in question ended some time ago. This means it is vital to consider the date the consumer became aware they had cause to complain.

“Legal costs, including how success fees are calculated, are a complex and specialist area. Even if a consumer has seen their bill, this doesn’t mean they’d know something could be unfair. This is the case whether they received the bill when their original dealings ended, or after asking to see it much later down the line.”

“As long as the consumer contacts us within a year, we’re likely to say they’re in time – and look into their complaint.”

4. A Consumer Complained a Solicitor Did Not Involve them in Discussions Concerning the Defendant’s Liability for Legal Costs. What Now?

Solicitors should remain mindful that these conversations do have a bearing on the consumer; the more the other side pays, the less the client pays. Regardless, solicitors generally don’t involve consumers in these discussions, and this isn’t necessarily unfair or unreasonable. However, the Legal Ombudsman has announced they are “unlikely to investigate a complaint about not involving the consumer (by “dismissing” it under our Scheme Rule 5.7a).”

“However, a consumer may complain about deductions that have been made from their compensation – where these conversations may be relevant. Subject to other rules and time limits, we’re likely to look into a complaint like this.”

“The basis of the charges needs to be both reasonable and properly explained to the client. Without this, it is extremely difficult for a lawyer to argue that they have satisfied their obligations as part of a reasonable service.”

For the Legal Ombudsman’s Approach to Success Fees & Conditional Fee Agreements, click here.

To read the full Legal Ombudsman’s statement and review case studies, click here.

RACO: Expert Legal Advice

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